January 18, 2019

Top Trends in Fresh: Hyperlocalization, New Supply Chains and Prepared Food

There’s nothing stale about the fresh category in retail, which is arguably turning the food retail business on its head. It’s the ultimate disruptive category when it comes to competing for share of the food retail business.

Disruption

Food retailers will continue to find ways to distinguish their businesses in the marketplace by focusing on fresh. Even after years of growth, fresh foods segments are being tapped for bigger space allocations in the store over the next two years, given that shoppers continue to gravitate toward these categories, per the 2018 U.S. Food Retailing Industry Speaks operations survey. Our research suggests that retailers have found ways to further engage consumers and differentiate with fresh foods, better-for-you categories, and private brands, among key growth segments. They are advancing same-store sales and planning new investments in their businesses.

The latest trends in localization, supply chain methods and prepared foods include how to win within each meal prep state and how the most successful retailers integrate them all the ways in which CPG manufacturers and retailers are using various tactics to accelerate sales in the perimeter.

Two big trends are paying off in the perimeter of the grocery store today,  One is transparency—the shopper’s desire to know more about where their food comes from and how it was made. The second is social and cultural alignment, or a company’s ability to grow sales by integrating consumer motivations and values that impact sales. These are two of the Top Trends in Fresh identified in our research conducted with IRI that are reshaping the shopper’s fresh food experience.

The Fresh Foods Shopper and Transparency

Two in three fresh food shoppers report that health & wellness/transparency has become a more motivating factor when they shop than in the past. Today’s fresh food shopper expects clarity, accuracy and usefulness of food-related information from producers and retailers. Nearly half of the fresh shoppers define healthy food by the “absence of the bad stuff.” For these shoppers, the focus on organic remains important and a key factor in selecting products.

When it comes to transparency, the order of factors that are important to fresh food shoppers are:

  1. Health & wellness – 65%
  2. Free of growth hormones – 33%
  3. Free of antibiotics – 32%
  4. Free of pesticides or fertilizers – 31%
  5. Non-GMOs or bioengineered ingredients – 30%
  6. Non-irradiated foods – 15%

Consumers want to know precisely where their food comes from — and shoppers’ desire for local food isn’t limited to the produce section. While this is still important, shoppers also want to support local businesses in their communities, ranging from the neighborhood bakery to ready-to-eat prepared foods found in a local deli or startup. This final installment of the 2018 Top Trends in Fresh webinar series focuses on how CPG manufacturers and retailers can view and navigate this complex environment through the lens of the consumer in order to achieve new growth in the perimeter.

Listen to the free Recording 

Speakers: Rick Stein, Vice President of Fresh Foods, Food Marketing Institute Chris DuBois, Senior Vice President, Strategic Accounts, IRI Jonna Parker, Principal, Fresh Center of Excellence, IRI